In the fall of 2016, I wrote a story for CKGSB Knowledge magazine, called “The Middle Minority” (full issue PDF, with gorgeous cover art, available here). The premise of the article: What do we mean when we say “China’s middle class?” Who is that exactly?

Suffice it to say that is not an easy question to answer, but I managed to draw a few useful lines. Summed up: by domestic standards, they are a minority at the top of the heap; but compared to the US or Western Europe, they are perhaps a bit behind; and for many them, especially the younger ones, the future holds a good deal of uncertainty. …it was an interesting introduction.

But I wanted to go further with the topic, and try to gain a deeper understanding of this often-hyped newly prosperous generation. The end result is China’s Evolving Consumers: 8 Intimate Portraits. The book is a collection of essays, each of which takes a close look at a particular kind of person, caricatures you might say, drawn from what can be loosely termed the “new middle class.” The book sheds new light on some already well-worn stereotypes, such as “Tuhao” and “Successful Single Women” (which you may know by the less flattering term “leftover women”). In the spread of characters, from the “Comfortably Elderly” to “China’s Generation Z,” the book tries to give a sense of just how much China has changed in the past few decades, and what that change means across several generations.

The other unique feature of the project is the contributors, one for each chapter. The diversity among these authors is almost as great as the subjects themselves: there is a mix Chinese and foreigners, market research professionals and academics. Some contributors approached their subjects much from the outside. Others, such as the author of “Modern Chinese Mothers,” are members of their own group. The result is a book that not only offers close-up views on eight different types of people, but also eight different ways of looking.

The intended audience of this volume is marketing professionals who are new to China. For these readers, the book provides a value that is beyond the sum of the individual chapters—it gives a rough sense of the total market landscape, the social forces acting on people’s lives and how brands might help individuals make sense of it all. While the book does not provide ready-made answers for how to successfully promote your particular brand, it does, however, provide a solid foundation for smart, insightful questions to get you started.

Pallavi Aiyar’s recent piece in Granta, The Foreign Correspondent, in part tackled the issue of bias in western reporting on China, a topic I’ve spent a lot of time thinking about, from the viewpoint of a non-westerner… a perspective I’d never before considered. Seeing as I live in a dorm shared by people from many nations, India included, on a scholarship program whose purpose is to push Chinese soft power to largely non-western countries, perhaps I’m a bit embarrassed by that…

In the piece, Aiyar also considers her time spent as a foreign correspondent in Europe, which (for me anyway) was also eye-opening. It’s so good I’ll link to it twice: Go read it.

That said, Aiyar seems to have a misconception about Chinese history when she talks about “…the relative dignity that China’s Communist revolution had brought to labour, albeit at a terrible cost.”

The passage about Yu Bao Ping, the public toilet worker, and his life as compared to similar people in India is revealing… but it implies that China used to have a caste system like India, or something similar. That is not at all the case. A full explanation is would take a lot more space, but suffice it to say that Chinese society under the Qing dynasty, which fell in 1912, was surprisingly fluid. Individuals and families routinely climbed the social ladder, and also fell off of it. Perhaps my understanding of traditional Indian society is wrong or too limited, but China did not have a widespread, durable system of fixed social rank… save perhaps the imperial family and others at the very highest levels.

Linking the relative dignity of Chinese workers in everyday social life today to the efforts of the Chinese government is a misattribution. Yes, the Chinese government did praise the workers… but it didn’t solve the problem of a permanent underclass, because that underclass did not exist. Moreover, the idea that class differences and exploitation largely led to China’s social ills – i.e. the raisond’êtrefor the CCP – has been in dispute for a long time. Not that it didn’t exist… but that the “evil landlords” were the big shadow of a smaller devil that became the object of blame.

I don’t think Aiyar’s apparent misunderstanding outweighs everything else that’s great about her essay – not even close. It does, however, provoke a worthy question: How well does government policy fix harmful social attitudes? (Class-based disdain being among them.)

In addition to putting workers, even toilet cleaners, on a pedestal, China also vigorously fought a number of “feudal practices” including arranged marriage, superstition such as ancestor worship, and preference for boys over girls. And the track record? Arranged marriage did take a hit, but bride prices did not disappear for a very long time, and still do exist today albeit as a kind of quaint formality (think the father walking the bride up the aisle). It did basically nothing for superstition, although that might not be seen as an actual “problem.” And preference for boys was in fact transformed into a drastically worse problem by the government’s one-child policy.

That last one is particular interesting to me. Aiyar homed in on toilet workers in Beijing, but my guys in Shanghai are cab drivers. A few months back I was chatting with a cabbie and politely asked about if he had any children: Boy or girl? “A girl,” he said, “and I am really happy about that.”

Reading my surprise, he went on to explain that having a boy has gotten far too expensive. Because of the current marriage customs and economic realities, a parent must supply the lad with a house and a car. If he doesn’t have that, he doesn’t stand a chance at landing a wife (supposedly).

Whether that counts as an “improvement” in social attitudes is question for another day, but it’s definitely a change. And not one that was caused by policy intent. By the way, I’ve since heard the exact same thing from a fairly large number of people.

Considering my own country, America, government intervention has not solved race-related problems. Positive government changes in that arena, as well as women’s rights and gay rights, have mostly been a reflection of the demands of the people and not a guiding hand for the people. In this sense, I believe that government can support positive social change, but I doubt whether it can do much on its own to move the needle forward.

Aiyar’s mission to hold up a mirror to Indian government, instead of taking the Chinese government to task as western reporters do, is admirable. And I can see how this works – can our democracy not do what an authoritarian country can do? But one should keep a handle on what the government is and isn’t doing, which is admittedly difficult.

Some authors, such as Perry Link, seem to think that Chinese government deserves no credit for the past 30-odd years of change and development. That’s a ridiculous and reductive opinion. The government itself, on the other hand, claims credit for everything. Neither are true.

My general feeling is this: That any government has limited power to support and encourage progress, nearly unlimited power to fuck things up, and grave responsibility for both. And perhaps that’s a good way to begin measuring the quality of a government – in any case, certainly better than trying to draw a direct comparison between two radically different societies.

This past week, I had my first Chinese article published at Shanghai Lexicographical Publishing House. The book, “Jing Mountain Research,” is a collection of articles and essays about Jing Mountain Village, in the Yuhang District of Hangzhou. It includes work by my Professor at East China Normal University, Dong Jianbo, whose made a academic career out of studying the history of the local economy in this region.

My piece, “Jing Mountain New Economy,” is a description of how the village has changed as it marketed its local tea with a historical flavor, and rebuilt the 1,000-year-old temple site into a tourist destination. In short, the villages became rich, built new house and sent their children away to school. With the local economy booming and construction in every place you look, there is scarcely anyone under 30 to found (save some small children).

At the end of last month, Christina Larson published a story in Foreign Policy about a very similar village in Yunnan (http://foreignpolicy.com/2015/10/30/why-puer-tea-is-the-next-big-asset-class-transforming-chinas-villages-green-gold/). A surge in interest in storied Yunnan pu’er tea made the villagers who’ve long cultivated the unique leaves suddenly, and unexpectedly, wealthy. The parallels between Larson’s Yunnan village and Jing Mountain are striking. In fact, this is a fairly widespread phenomenon in China, although few if any places command the prices for tea as Yunnan pu’er.

A key difference, however, seems to be the investment in tourism. Larson’s Yunnan village is far flung, but Jing Mountain is part of Hangzhou, the thriving metropolis home to Alibaba, and not far from Shanghai. The Jing Mountain Zen Tea Culture Travel Collective has invested some US $40 million in giving the Jing Mountain village a bevy of brand new Buddhist temples – and so the villagers are making a large portion of income from opening hotels and restaurants as well as selling tea. From reading Larson’s piece, infrastructure seems to be better in Jing Mountain, and of course villagers have better access to the modern world, being near Hangzhou.

The difference says something about economics and geography in China: Location matters. Yunnan, among the poorest provinces of China, has a per capita GDP just one-third of Zhejiang. There are far fewer opportunities there. Like Larson, I also worry about the sustainability of their windfall tea economy.

If you can read Chinese (or just want to look at the pretty charaters), download the PDF I made: JingShan_New_Economy

With fears of both a bubble and an economic slowdown, China must carefully manage residential real estate

In Shanghai last October, a group of around 400 newly minted homeowners took to the streets after their property developer made steep price cuts, exceeding 25 percent according to one report. The group demanded refunds, waved a banner and eventually damaged one of the company’s showrooms. Refunds were never offered, and they didn’t receive much sympathy from a Chinese public that has been largely priced out of home ownership the past decade. It was a decidedly minor incident, indicative of only one side of the problem, but that didn’t stop some from seeing it as a preview of the collapse to come.

The seemingly precipitous drop in Shanghai residential real estate was the deliberate result of recent national policies designed to curb the perceived property bubble growing since the mid-2000s. According to TheNew York Times, Shanghai prices rose by more than 150 percent between 2003 and 2010, making housing unaffordable for many residents, particularly the young. Measures introduced early last year to avoid a potentially calamitous bubble included restrictions on the speculative purchase of multiple properties, an increase in home buying requirements and a massive government program to build more low-income housing.

With the subsequent nine-months of relatively slow and even-keeled decline in the country as a whole, isolated demonstration notwithstanding, the policy seemed to be working. That is until a relatively sudden up-tick in June.

Not So Simple

Real estate occupies a special place in the growing Chinese economy, and as such there are concrete reasons to worry over residential real estate price jumps in either direction. On the one hand, housing in big cities at 20-30 times the average Chinese income is clearly unsustainable, a fact that Premiere Wen Jiabao has acknowledged by repeatedly stating his commitment to price-dropping, anti-bubble policy tactics.

But on the other hand, property development is an outsized portion of China’s GDP, all told between two and three times that of most western countries. This year’s worrisome slowdown in China’s growth is seen as largely due to precisely those policies, the resultant drop in raw materials production and, perhaps worst of all, corresponding losses in jobs. With the weak U.S. recovery and Europe on the brink, a slowdown any deeper than the April-to-June period’s 7.6 percent growth figure threatens the entire global economy.

But it’s important to remember that situations can change rapidly inChina, and no matter what happens, somebody, somewhere will predict imminent disaster. In May, a blog post by a prominent professor at Tsinghua University’s School of Economics and Management argued that China’s real estate market was unraveling, with sales falling over 20 percent January to February. Later in July,China’s National Bureau of Statistics reported a home sales increase of 41 percent May to June, with prices at an 11-month high. Talk of re-inflating the dangerous bubble promptly resumed.

If it sounds like things might be somewhere in the middle, they probably are. Indeed, China Business Times reported in late June that housing prices in first-tier cities are virtually the same as two years prior, to the disappointment of many young would-be homebuyers. But all things considered, that’s quite a bit better than some alternative situations, and nobody turned out to protest.

Moving forward, China must strike a delicate balance of stable, affordable housing without losing the critical GDP growth provided by construction. That’s no easy task, but with Beijing’s ongoing commitment to curbing dangerous speculation while building up low-cost housing, it’s clear the rudder is pointing in the right direction.